Tax Withholdings for New Homeowners

There are many tax benefits to homeownership. One of them is to reduce our income taxes paid to Uncle Sam at the end of the year. A common mistake that new homeowners forget to do is to adjust their withholding exemptions adjustments on their paychecks.

Since mortgage interests are now a tax-deductible line item on your Form 1040 Income Taxes, you may be a candidate for Itemized Deductions on Schedule A instead of taking the Standard Deduction. If you had not made adjustments to your withholdings to anticipate for these additional benefits, you would more than likely have a tax refund at the end of the year. Why let Uncle Sam have your money interest-free?

The extra take-home pay you take back can be put to better use: savings, paying off consumer debts, or better yet take the extra money you have and put that back towards your mortgage as extra principal payments. That sounds like a sweet deal to me.

Standard Deductions for 2008 are:
Single(s) $5,450
Married couple(s) $10,950
Head of household(s) $8,000

Depending on when you purchase your home this year, you may or may not qualify for the Itemized Deductions. Also, don't forget to add your property taxes to the mortgage interests on Schedule A. Typically, these two line items make the largest number on the schedule. If you have old furniture you do not want to move into your new home, donate it. Uncle Sam also helps you with a charitable contribution line item on your tax.

To calculate your Withholding, visit Uncle Sam's IRS website here.

Fill out a new W-4 Withholding Form here.

Read also, my counter-part's blog (Bill Gassett of Metrowest MA Real Estate) on Tax Deductions to Remember When Getting a Home Loan.

If you are interested in finding your Homeownership Tax Benefit, check out Scott Burn's Calculator on the Dallas Morning News.

My advice would be for you to seek a tax consultant to work on your taxes so that you will maximize your tax benefits available to you.

 

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I proudly serve and sell real estate in the northern suburb cities of the Dallas metroplex. If you are thinking about purchasing or selling your home in neighborhoods of Frisco, Plano, Dallas, McKinney, Allen, Little Elm, Prosper, Celina, Richardson, Dallas M-Streets, Dallas White Rock Lake area and other surrounding areas and more importantly, want to work with a local area expert, contact me immediately.

It is a competitive market, hence it is important that you choose to work with the realtor who knows these communities like none other. I employ a systematic market approach in selling your home - an intentionally unique proposal that most real estate agents do not use. If you care to be on your way to a successful closing, contact me immediately to see how different my proposition will be.

Contact:
Loreena Yeo
Realtor®/ Broker of 3:16 team REALTY
(214) 783-2210
loreena@loreenayeo.com

 

 

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